Originally Posted by
AD200100
Can someone shed some light on what is AA business plan? What's the targeted market?
When I'm looking at Delta it's obvious what is the short and long-term plan with branding them as a premium product ("pay more for experience and quality)
United set pretty much on the same market with more focus on international and reaching out to audiences outside of the US.
What's AA going for? With the Oasis project they gave the impression of moving toward a LCC model, but then building high-end business class contradicts it. Utilizing the WB for domestic over international was a great way to make more profit and also gave an impression that the airline preferred to focus more and more on domestic but then set an order for more 787 (and even showed interest in the boom sonic project which is international operation only).
It's not a question of what's going on (the airline is doing very well, unlike a lot of the unjustified comments here...) but whats the actual business model is.
I think it's a fair question. Some negative people on here will surely tell you there isn't a strategy, but that's not entirely true. The truth is the plan just isn't as flashy DL's or UA's plan.
AA has decided to focus largely on its fortress hubs. While Delta and United are pumping significant investments into competing in highly competitive markets like NYC and LA, AA has decided to focus on absolutely dominating its largest hubs. DFW, CLT and MIA are huge money makers with no competition except minimal presence from LCC's and AA has decided to focus on where the money is.
These hubs are much bigger markets for domestic flying than international flying, which is part of why AA has backed off on it. The other part of this equation is AA retired 757/767 and A330's all during covid. This reduced international capacity greatly, but it should be restored to some extent as these 787's continue to come in over the next few years.
AA's number one overarching strategy is paying down large portions of its debt. There will be no large-scale growth until the debt is taken care of. The company has been successful and is ahead of schedule. Once AA's debt reduction goals are met, I think there will be room for expansion.
AA is doing the right things and is taking important steps to secure a bright future. While the other legacies are taking on debt ordering hundreds of new airplanes (largely as replacements) and putting tv screens in 25 year old airplanes, AA is paying theirs down while maintaining a young fleet. AA has some ground to make up, but it has a chance to be an industry leader in profitability in 5-10 years if management plays its cards right.